This Is What The Fed Will Most Likely Say Today

Finally, in an interesting, if completely meeaningless exercise, Goldman conducted "probit regressions to quantify and analyze the growth and inflation assessments of the FOMC statements of the past decade."

Focusing on the FOMC statements since 2007—an inflection point in the era of enhanced central bank communication—Goldman classified the growth and inflation language of each statement into six ordinal groupings, following a similar approach used in past research to analyze inflation pressures in the Beige Book. For example, the FOMC statement’s characterization of job growth during this period has run the gamut from “strong” and “solid” to “softened” and even “declined steeply.” This is charted below:

What does this mean for the June FOMC statement? As shown in the chart below, Goldman expects an upgrade to consumer spending (to “picked up in recent months”) and an adjustment to the job growth language (to “solid” from “strong on average”), but no changes to business investment or overall activity. With regard to the inflation assessment, the bank finds that the modestly lower pace at the June meeting (1.80% core PCE yoy vs. 1.88% at the May meeting) has not historically been enough to warrant a downgrade to the inflation rate (from “close to 2 percent”).

And yes, this is the kind of "analysis" you do if you are an economist with way too much computing power and time on yours hands.